The whole cost of employee health benefits is expected to increase 5% in 2020, topping $15,000 per employee, according to the National Business Group on Health yearly survey of almost 150 of the country’s largest employers.
To help curb prices, large companies are embracing a few of the ideas being debated in Washington, like passing drug price reductions directly on to employees.
They are also increasingly open to the authorities playing a larger role in controlling health costs — even enlarging Medicare accessibility under certain conditions, according to the survey, which covered benefits for 15 million people.
When open registration rolls around this fall, employees probably won’t find key differences in their overall medical insurance coverage for 2020, but could see changes in their pharmacy benefits and new networks created to steer them to the cheapest maintenance.
Passing on medication discounts
Some 20percent of large companies say they will change next year from conventional pharmacy benefit contracts, which have depended on drug manufacturer rebates to hold down the costs of premiums. Instead, they will pass those pharmaceutical discounts directly to employees in the pharmacy counter. Some 60% plan to make the change by 2022.
While some employees could see lower out-of-pocket prices for high-priced medications, others could see increased cost-sharing for premiums.
But even with pharmacy benefit changes, companies are worried about now they are going to cover new gene therapies coming to market with record costs, like Novartis’ $2 million spinal muscle atrophy therapy Zolgensma.
“This is a new frontier, and employers aren’t sure what is the best course to address this. The frustration level around these prices is so high, employers would consider this as a place where the government should be stepping in — from a financing negotiation perspective,” clarified Brian Marcotte, NBGH president and CEO.
Three out of four companies surveyed would consider financing a plan where the government would sue for pharmaceutical treatments that cost more than $1 million, and almost half would prefer national funding to underwrite part of the price for such drugs.
“That’s not something employers typically say,” noted Marcotte.
Direct contracting with physicians
More companies are contracting with hospitals which are considered centres of excellence for surgical procedures and treatment for cancer and other complex ailments.
Next year, almost half of large companies surveyed say they’re seeking to contract directly with physician groups for so-called innovative main care. They are paying doctors to look after patients with chronic conditions for a general fee, as opposed to paying for each individual trip.
For some physician groups which could mean going beyond visits. Doctors contracted by one NBGH employer discovered they could reduce 1 employee’s emergency room visits for asthma attacks by getting him help at home.
“They sent a cleaning team to that individual’s home to clean the house, change the air filters in an effort to reduce… asthma attacks that would lead to ER visits, and saw that following that, the ER visits significantly dropped off,” said Marcotte.
Medicare for older employees
One key medical care issue employers are seeing in 2020 is the disagreement over Democratic party “Medicare for All” proposals. Over 70percent of those surveyed think that the universal medical care proposals would decrease the amount of uninsured, but might lower the sort of health innovations that help lower prices. Four out of five companies believe it will also lead to higher taxes.
“You’ve got 180 million people being covered by commercial insurance, making a transition from our model to a more socially-based model is easier said than done,” Marcotte said. “So, there’s a lot of questions about how it will be addressed.”
While companies continue to think they could do a better job providing benefits for their employees than the authorities, they are split in regards to extending Medicare coverage for older workers. Over half of those surveyed by NBGH would encourage expanding Medicare for people under 65. One in four supports decreasing Medicare eligibility age to 60, while another 23 percent would prefer expanding coverage beginning at age 50.